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Friday, 20 April 2007

Delivering the Digital Goods: iTunes vs. Peer-to-Peer

Sean Silverthorne has an interesting interview with two Harvard researchers, Ramon Casadesus-Masanell and Andres Hervas-Drane, who have been working on questions like:

How does Apple, which sells music titles for 99 cents each, compete
with free music downloads on peer-to-peer networks? Do the two
approaches to distributing digital content complement each other? What
can the music industry, which aggressively fights p2p downloaders,
learn from Apple's experience?

One of their finds was:

While the study of business models in isolation is of great interest, we believe that the analysis of interactions
between business models can highlight important hidden insights. In
this paper, for example, we show that contrary to the popular view, p2p
and iTunes can potentially develop into a mutually beneficial symbiotic
relationship. The presence of iTunes has a negative impact on the size
of p2p networks resulting in reduced congestion and more efficient file
sharing. Better functioning p2p networks, in turn, result in more
content exchange, affecting positively iPod sales and Apple's bottom
line.

Link: Working Knowledge. Thanks to Chuck McConnell for the link. The paper mentioned, Peer-to-Peer File Sharing and the Market for Digital Information Goods, is presented in summary form only on the Harvard site (Paper No. 07-069), but you might check back later for the full version since most other papers listed have pdf links. --Dennis